Current Account
A current account, also known as a financial account is a type of deposit account maintained by individuals who carry out significantly higher number of transactions with banks on a regular basis. It is created by the bank on request of the applicant and is made available for frequent or immediate access. Current accounts relate to liquid deposits and it offers a broad range of customized options to aid financial dealings. Current accounts also allows to make payments to creditors through the cheque facility offered by the bank.
Features of a Current Bank Account
A current bank account is one of the primary requirements for starting a business. These days, banks offer a number of attractive offers and benefits on current accounts to match the diversified needs of businesses. Listed below are some of the basic features of a current bank account:
- A current account allows transactions beyond the scope of a savings account
- Compared to the savings account, a current account requires a higher minimum balance
- It is designed to facilitate frequent transactions – transfer funds, receive cheques, cash, etc.
- A current account can be operated by individuals, proprietary concerns, public and private companies, associations, trusts, etc.
- No restriction on the number of transactions in a day
- Non-maintenance of the minimum balance can attract penalty charges
- Just like a savings account, KYC guidelines are to be followed even for current accounts
- For a single business, there cannot be multiple current accounts
- The prime objective of the current account is to facilitate smooth transactions for businesses
- Nowadays, some banks offer interest rates on current accounts as well
- Current accounts charge interests on short-term funds the account holder has borrowed from the bank
Monthly Average Balance (MAB) Requirement on Basic Current Account of Different Banks
| Bank | Monthly Average Balance (MAB) | Free deposit limits |
| HDFC Bank | Rs.75,000 | 10 times the MAB |
| ICICI Bank | Rs.25,000 | 12 times the MAB |
| Axis Bank | Rs.10,000 | Up to Rs.2 lakhs |
| IndusInd Bank | Rs.10,000 | Up to Rs.2 lakhs |
| Canara Bank | Rs.1 lakh (quarterly) | Up to Rs.5 lakhs per day |
| Yes Bank | Rs.1 lakh (quarterly) | Up to 10 times of AMB |
| Punjab National Bank | Rs.1 lakh (quarterly) | Up to Rs.2 lakhs per day |
Benefits of a Current Account
- Allows for prompt business transactions
- No limit on withdrawals
- No limit on deposits in the home branch
- Enables businessmen to make direct payments using cheques, demand drafts, or pay orders
- Provides overdraft facility
- Provides internet banking and mobile banking facilities
Types of Current Account
Banks offer different types of current accounts to suit the differential needs of their customers. You should have a clear understanding of the nature of transactions you wish to carry out after opening a current account. Here are some of the common types current accounts offered by banks:
Standard Current Accounts
It’s a non-interest bearing deposit account with minimum balance requirements and a stipulated monthly average balance. It offers chequebooks, debit cards, overdraft facility, etc. Other features may include internet banking, SMS banking, Free RTGS and NEFT transactions, etc.
Packaged current accounts
The packaged accounts offer a lots of perks to accountholders. It comes with additional features such as travel insurance, medical support, roadside assistance, etc.
Single column cash book
Simple cash accounts or single column cash book accounts allow for daily transactions but does not provide features such as overdraft facility. It is suited for those businesses that do not maintain bank accounts. It is a cashbook which records the daily transactions under separate columns for debit and credit.
Premium current accounts
It comes with exclusive offers and benefits to accountholders. The account provides a multitude of customized features and it is generally suited for those who carry out high financial transactions.
Foreign currency accounts
For those individuals or businesses that require frequent transactions to be carried out in foreign currencies, a foreign currency account is the best option.
What are the Different Ways of Depositing Cash in Current Account?
You can deposit cash in your current account using any of the following methods:
- Depositing cash at any of the branches of your bank
- Cheque deposits
- Electronic transfers
- Wire transfer from abroad
Documents Required to Open a Current Account
You need to submit the following documents at your bank to open a current account:
- PAN card
- Address proof
- Companies or trusts must submit a certificate of incorporation and memorandum of association
- Partnership agreement in case of partnership firms
- ID and residence proof of all partners
- A color photograph of the applicant(s)
- Cheque from existing savings account for account opening
- Companies should provide address of communication
Note: Make sure that the KYC documents you submit are valid on the date of submission.
